India solves ad-blackout problems
May 7, 2013
By Chris Forrester
Advertisements are again being played on India’s most popular TV channels. The stalemate between the Indian Broadcasting Foundation (IBF), representing the broadcasters, and how they billed ad agencies over the commercials they carried, has been resolved.
IBF board member and Star India CEO Uday Shankar told local reporters: “We have an agreement to do net billing. But we have also created a mechanism in the invoice and contract to enable agencies to charge the fees separately from advertisers effective 1st May.”
From May 1st invoices that broadcasters raise to agencies will have a clause included which states that the advertiser and agency are free to have a compensation relationship which is an accepted industry practice. The agencies will then charge clients their commissions on top of that in the invoices sent to the creative houses.
The ad agencies were not happy with the previous arraignment given that it exposed them to potential arguments with India’s tax authorities.